SOURCE: The St. Petersburg Times
DATE: Issue #1573 (34), Friday, May 14, 2010
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TITLE: Leaked Paper Says ‘Kinder’ Foreign Policy Required
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia’s foreign policy should become much friendlier in order to attract more investment, especially from the West, according to a leaked Foreign Ministry paper.
The document, titled “Program for Effective Use of Foreign Policy in the Long-Term Development of Russia,” amounts to a new, softer foreign policy after years of hostile relations with the West, according to Russian Newsweek, which first published the document.
Officials at the Foreign Ministry and the Kremlin confirmed the document’s existence Wednesday, but they rejected the notion that it amounted to a new doctrine.
The text is simply a response to President Dmitry Medvedev’s call to make foreign policy a driving force for foreign investment, a senior Foreign Ministry official told The St. Petersburg Times, requesting anonymity because the document has not been officially released.
“The president set a task of helping to set up favorable conditions for economic growth,” he said.
In his state-of-the-nation address last November, Medvedev called on the Foreign Ministry to become the locomotive driving foreign investment to Russia — money that he said was needed to implement his plan to modernize the economy.
The document calls for better relations with the United States and the European Union to achieve the country’s economic goals.
Russia needs to forge “modernizing alliances” with its Western European partners and the EU as a whole to attract foreign capital, Foreign Minister Sergei Lavrov wrote in the introduction to the 13,000-word paper, posted on Russian Newsweek’s web site.
“The program’s spirit is a foreign policy with neither friends nor enemies but only interests,” the magazine said.
But the document also calls for exploiting the economic crisis to acquire industrial and energy assets in former Soviet republics — countries where Russian influence is often rejected as imperialism. For instance, it defines the three Baltic states as an area of “seriously devalued national assets” that is “no longer attractive for investment from EU members.”
It was unclear Wednesday if and how the text would translate into real policy changes.
Medvedev approved a draft document in February, and it has been sent to the government, where it is currently being finalized by First Deputy Prime Minister Igor Shuvalov, Newsweek reported.
But the presidential administration denied on Wednesday that Medvedev had given his approval.
“The president so far has no relationship whatsoever with this document,” Kremlin spokesman Alexei Pavlov said.
Pavlov also denied that the paper amounted to a new strategy. “Russia does not have two-year terms for its foreign policy strategy,” he said.
In 2008, Medvedev signed a new foreign policy strategy that granted unprecedented rights to Prime Minister Vladimir Putin and affirmed the course set during Putin’s presidency.
The strategy’s release coincided with a keynote speech by Medvedev to the country’s ambassadors in July 2008. The so-called ambassadors’ assembly convenes every two years, and the next meeting will be in July.
Analysts warned against expectations that the document was the official basis for a softer foreign policy.
“The main question is not what is written in a doctrine. The main question is what will happen in 2012,” said Nikolai Zlobin, director for Russian and Asian programs at the World Security Institute in Washington.
Medvedev’s term ends in 2012, and both he and Putin have left open whether they will stand in the presidential election that year.
Despite Medvedev’s softer rhetoric, the country’s foreign policy has actually seen a toughening during his presidency, Zlobin said. As examples he cited the 2008 war with Georgia and the subsequent recognition of Abkhazia and South Ossetia as independent, as well as Moscow’s decisive support for pro-Russia politicians in Ukraine and Kyrgyzstan.
“President Putin said very strong anti-Western things, but actual policy was often much softer. Under Medvedev, we are seeing the opposite,” Zlobin said.
Alexander Konovalov, president of the Institute for Strategic Assessments, a think tank, said the paper might serve as a guideline for the rest of Medvedev’s presidency but could not become a doctrine. “Otherwise, it will be hard to square with the current military doctrine,” he said.
Released in February, Russia’s new military doctrine includes NATO’s expansion on a list of “military dangers.”
But Andrew Somers, president of the U.S. Chamber of Commerce in Russia, said he welcomed the message that foreign policy should actively help economic ties.
“This is a very healthy trend, consistent with [President Barack] Obama’s statements that U.S.-Russian ties should have more economic substratum,” he said.
Increased economic partnerships between both countries would make it easier to solve political problems, he said.

TITLE: Rosatom Seals $20Bln Turkish Deal
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Turkey on Wednesday agreed to let Russia build and own a $20 billion nuclear power plant in a deal that opens a new page in Russia’s global expansion in the industry.
Sergei Kiriyenko, head of Rosatom, the state nuclear corporation, signed the agreement to build four reactors on Turkey’s southern Mediterranean coast during a visit by President Dmitry Medvedev to the country.
In a first, Rosatom will control the facilities and sell the electricity that it generates, Kiriyenko said.
“It’s an extremely important contract for us. We have been craving this for a long time,” he told reporters after the signing. “It’s much more interesting for us to be co-investors in such projects.”
Rosatom’s other deals outside the country — most notably in places like China, India and Iran — exclude the company from any ownership or management role. Financially, the Turkish agreement is smaller than Rosatom’s plan to build 16 reactors in India.
In executing the contract, which crowns years of negotiations and a contentious tender, Rosatom will initially establish a fully owned subsidiary to start the work at the Akkuyu site, Kiriyenko said. Later on, it will offer up to 49 percent of the venture to investors in and outside Turkey, he said, estimating construction costs at $20 billion.
“Turkish investors are interested. We’re also holding talks with European investors,” he said, declining to identify potential partners.
Rosatom won the bidding for the project in September 2008. Spurring the current deal, a Turkish court delayed awarding the contract because the company was the sole bidder.
“This is a smart move for Turkey … because they don’t have to pay anything upfront, just provide the site,” Kiriyenko said, referring to Wednesday’s agreement.
Turkey’s state electricity generating company EUAS will hand over land for the project free of charge, the Cabinet said in guidelines for the deal published Wednesday.
Rosatom expects to recoup costs 15 years after completing each reactor by selling half the electricity to Turkey’s state energy company Tetas at a fixed price and offering the rest on the unregulated market, according to the contract guidelines. Afterward, Rosatom and its partners, if any, will transfer 20 percent of the profit to the Turkish government.
Rosatom has until mid-August to start creating the subsidiary to build the plant, according to the contract. Rosatom plans to open the first reactor within seven years after securing all construction permits. It will then complete one reactor every year for the next three years.
Rosatom may also set up a facility to make nuclear fuel in Turkey.
In other energy issues, Russia and Turkey will continue considering gas trade projects such as Blue Stream-2 and South Stream, Medvedev said after talks with Turkish Prime Minister Recep Tayyip Erdogan in Ankara.
In a goodwill gesture, Gazprom allowed Turkey to buy as little as 75 percent of the 16 billion cubic meters of gas that the country had originally agreed to buy this year through the Blue Stream pipeline.
Normally, the Russian gas export monopoly charges penalties if its customers buy less than 80 percent or 85 percent of contracted volumes, a condition that irritated many European energy companies after the economic downturn reduced demand.
The countries also are looking at Russia’s possible involvement in the Samsun-Ceyhan oil pipeline, which is now a joint project between Turkey’s Calik and Italy’s Eni. If built, the pipeline will carry Russian and Kazakh oil across Turkey on a potentially safer and faster transit route than the congested straits connecting the Black Sea and the Mediterranean Sea.
Erdogan said an energy security agreement signed Wednesday made a priority of the oil link, whose cost was put at $3 billion by Deputy Prime Minister Igor Sechin on Tuesday.
Medvedev said Russia and Turkey signed deals with a combined value of $25 billion on Wednesday. Bilateral agreements included dropping visas for tourists as soon as the countries agree on the terms of readmission for illegal migrants.
Medvedev’s visit to Turkey ended a Middle East trip that also took him to Syria, where he said Tuesday that Russia might build nuclear power reactors for the Arab country.

TITLE: Rescue Work Suspended at Mine, 24 Still Missing
PUBLISHER: Combined Reports
TEXT: MEZHDURECHENSK, Kemerovo Region — Rescue operations to find 24 workers missing in a Siberian coal mine explosion were suspended Thursday because of fears of a new blast, Reuters reported.
Nonessential workers and miners’ relatives were taken away from aboveground areas around the Raspadskaya mine because of safety concerns. One of the blasts at the mine late Saturday seriously damaged buildings on the surface.
The Emergency Situations Ministry said Thursday that the death toll from the explosions had reached 66.
A ministry official, Pavel Plat, told reporters at the mine that the concentration of volatile methane gas in the mine was rising and that several sizable fires were burning about 460 meters underground.
Plat said methane concentration at some points in the mine was 7 percent. A concentration of 1 percent is generally considered to be the limit of safe conditions.
“Our task now is to put out the fires and reduce the gas concentration, and only after this is done will we send people” to the area where the missing miners are believed to be, Plat said.
There have been no reports of contact with any of the missing, and prospects for any survivors appear to have all but vanished.
Many of the dead were rescue workers who went into the shafts after the first blast late Saturday and were caught in the second explosion four hours later — which was so powerful that it shattered the main shaft and a five-story building at the mine head. The mine is in the Kemerovo region.
There was no information on what set off the blast. 
President Dmitry Medvedev told top law enforcement and security officials to determine what led to the blasts and who might bear responsibility. “The results of this investigation, which presumably will take some time, must be absolutely public, because many of our comrades died there — many of our people,” Medvedev said in televised remarks.
The deadliest explosion in Russia’s coal mines in decades occurred in March 2007, when 110 miners were killed at another mine in the Kemerovo region.
(AP, SPT)

TITLE: Mironov’s Life to Be Insured at $93,000
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The life of Federation Council Speaker Sergei Mironov is worth 2.8 million rubles ($93,000).
The administration for the Federation Council has decided to take out a life insurance policy for that amount for the speaker as well as policies worth 2.3 million rubles ($76,000) for each of the other 166 senators in the upper house of the parliament.
Insurers have until June 6 to bid in a government tender to offer the life insurance policies for the senators, as well as insurance from illnesses and accidents, according to a notice posted on the government’s web site for state purchases. Senators who fall ill or are injured in accidents would also be allowed to collect up to the full amount of their life insurance policy.
Federation Council Senator Vasily Duma said the proposed compensation was small compared with the possible cost of treatment.
“In today’s health care, this sum isn’t good for anything,” Duma said by telephone Wednesday.
Duma, a former president of Slavneft who represents the Kostroma region, also said the government should be providing insurance to socially vulnerable groups rather than insuring senators. “Let the state insure veterans and pensioners,” he said.
The proposed amount is lower than average for life insurance and high for health insurance, said Yulia Alyokhina, head of marketing for the insurer Ingosstrakh-Zhizn. She said life insurance usually amounted to two to 10 annual salaries.
In an income declaration released last month, Mironov said he earned 2.4 million rubles ($79,000) as speaker last year.
A senator’s average annual salary is 1.4 million rubles ($46,000), Novaya Gazeta reported in late March, citing the Federation Council’s press office.
The tender’s contact person, Lyubov Vinogradova, and Mironov spokesman Vladimir Yeryomenko did not take repeated calls to their offices Wednesday.
The tender’s results are to be announced by July 8.

TITLE: Russian Stocks Rise Most Worldwide on Oil
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian stocks rose the most worldwide as oil gained and Germany and Spain said their economies are improving, boosting appetite for riskier assets on signs that the global economic recovery is still on track.
Coal producer Raspadskaya jumped 12 percent to 147.70 rubles after being included in the MSCI Russia Index. Sberbank, the country’s largest lender, advanced 9.7 percent as the ruble strengthened 0.9 percent to 29.97 against the dollar, encouraging Russians to keep their savings in local-currency deposits. The MICEX Index climbed 4.3 percent to 1,391.87, helping push it to its biggest two-day gain in more than 11 months.
Crude, Russia’s chief export earner, gained as much as 0.8 percent to $77 a barrel in New York. Germany’s economy unexpectedly grew in the first three months of the year as rising exports and company investment outweighed the effects of the cold winter. Spain’s economy emerged from an almost two-year recession in the same period.
“Russia has been saved by good German GDP data, there was a sharp click up in the oil price,” Tom Mundy, a strategist at Renaissance Capital, said Wednesday. “No one was expecting the market to rally.”
Russian stocks, the world’s best performers last year as an economic recovery boosted the earnings outlook of oil and metals producers, have retreated 9.1 percent from their April 15 peak on concern that economic growth may slow.  
OGK-4, a power producer controlled by Germany’s largest utility, E.On, surged the most in seven months, adding 15 percent to 2.33 rubles after MSCI included the stock in its benchmark country index. Raspadskaya, which was also included, had a record 23 percent loss Tuesday after explosions over the weekend at its biggest mine killed at least 60.
Sberbank jumped the most since June 24 after the ruble had its biggest two-day gain in four months.
“Eighty percent of Sberbank’s assets are held in rubles,” said Natalya Orlova, chief economist at Alfa Bank. “It’s very sensitive to changes in the exchange rate.”
The currency closed 1.2 percent stronger versus the euro at 37.97. Those movements left it up 1 percent at 33.56 against a target euro/dollar basket that the Central Bank uses to manage exchange rate swings that hurt local exporters.  
Russia faces a capital influx as investors look for alternatives to Europe’s crisis-ridden debt markets, Mikhail Dmitriyev, president of the Center for Strategic Development, said in an interview Tuesday.
“The government is unarmed against the distortions that may result from massive capital inflows,” said Dmitriyev, a former first deputy economic development minister.
In the current situation, “some steps to contain the most volatile elements of capital inflow may be taken,” he said.
“The inflow of hot money, which will be taken out of euro-denominated instruments, will increase into countries with emerging economies, including Russia,” Deputy Finance Minister Sergei Storchak said Wednesday.

TITLE: Police Bust Casino in Apartment
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Moscow police have closed an illegal casino operated by a British citizen in a $60,000-per-month apartment in western Moscow.
The casino raked in tens of millions of rubles, easily recouping the cost of the luxury apartment on the 24th floor of a building on Mosfilmovskaya Ulitsa, police spokesman Filipp Zolotnitsky said Thursday.
Clients were admitted on recommendation, which had to be approved by the unidentified British owner, who has fled, Zolotnitsky told The St. Petersburg Times.
The casino had two poker tables, two roulettes, 10 gambling machines and a bar serving expensive drinks, including cognac for $15,000 a bottle.
Police have confiscated money in various currencies amounting to 15 million rubles ($500,000), Zolotnitsky said.

TITLE: Local Forum Seeks to Aid  Kids From Orphanages
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The St. Petersburg Social Adaptation for Teenagers Forum has called upon the city’s educational and work institutions to consider ways in which they can help youngsters from local children’s homes to get into higher educational institutions and find jobs. 
Getting into higher educational institutions and finding work are major problems for youngsters leaving the orphanage system in Russia, and they also encounter difficulties in finding accommodation, experts said at the forum last week. 
To discuss these problems and to find solutions, the forum brought together children’s home and social workers, as well as representatives from the local administration and the business community. 
“These children often don’t have an adult who can take care of them when they leave the children’s home, where they’ve got used to getting comprehensive care,” said Gulnara Kharisova, one of the forum organizers said. “They don’t have anyone who can then help them with their studies or with finding a job, and in the end they can lose their way.”   
Irina Denchenkova, a teacher from the city’s Children’s Home No. 46, said upon leaving the institutions, young people often don’t even know how to cook and do everyday things for themselves. Accordingly, they often get frustrated about more serious things like higher education and job hunting, she said.  
“Young people who have grown up in children’t homes often don’t even know much about different professions,” Denchenkova said. 
“For that reason, I think it would be good if colleges and universities organized special open days specifically for young people from children’s homes,” she said. 
A number of educational and professional organizations proposed ideas to help such young people. 
Irina Usoltseva, deputy head for educational work at the Design and Decorative Art Institute, said her students were prepared to come and organize workshops or seminars at the city’s children’s homes. 
“Our students can tell them interesting things about modern fashion trends such as cyber fashion or chaos in fashion. They can do hairstyles and make-up for the kids in the orphanages,” Usoltseva said. 
Such meetings could attract more youngsters from children’s homes to enroll in the institute and train as fashion designers or other related specialists, she said. 
Dmitry Merkulov, head of the youth policy committee at Russian Railways, said the company offers tailored programs for students of railway educational institutions. Students graduating from colleges or universities within that program are guaranteed jobs with Russian Railways. 
“From the age of 18, our company can also provide employment,” Merkulov said. 
The organizers of the forum said they were ready to help children from children’s homes and their potential employers get in contact with each other for further collaboration. 

For more information call: Nikolai Goryayev, +7 911 233 1589

TITLE: Deal on U.S. Adoptions Agreed
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The United States and Russia have agreed on key points of a treaty regulating child adoptions, and a final draft will be approved Friday for signing within two months, children’s ombudsman Pavel Astakhov said Wednesday.
The agreement, which Moscow demanded after a U.S. mother returned her 7-year-old son alone on a plane to Russia last month, will put an end to independent adoptions through lawyers instead of authorized adoption agencies, Astakhov said after a second round of talks with U.S. officials at the Foreign Ministry.
“There will be no so-called independent adoptions because this caused major problems. There was no opportunity to track a child’s well-being,” Astakhov said in a statement.
He said Russian officials had accepted a U.S. proposal under which agencies that participate in adoptions would have to receive U.S. accreditation and work in accordance with the Hague Convention on Intercountry Adoption, which has been ratified by the United States but not by Russia.
The boy who was returned to Russia was adopted independently, a process that Russian officials have complained does not allow them to monitor adopted children’s well-being.
Astakhov said the draft agreement will oblige adoptive parents and adoption agencies to report on the children’s health and living conditions and will allow social workers to visit homes to verify the reports.
“We have reached agreement on all key issues and have noticed a readiness to sign such an accord,” Astakhov told journalists.
Members of the U.S. delegation, headed by senior State Department official Michael Kirby, could not be reached for comment Wednesday.
Russia effectively suspended adoptions after Artyom Savelyev, now 8, was sent unaccompanied on a plane to Moscow on April 8 with a note from his U.S. adoptive mother that said he was violent and psychologically unfit. Torry Hansen, 32, is still de jure his legal parent.
The Washington-based World Association for Children and Parents filed a petition Tuesday before a circuit court in Tennessee asking that an investigation be opened to determine whether the boy was abused, neglected or abandoned, The Associated Press reported.
In Russia, 120,000 children are registered as orphans every year, senior United Russia official Tatyana Yakovleva said Wednesday.
About 3,500 Russian children are currently in the process of being adopted by about 3,000 U.S. families, according to the Joint Council on International Children’s Services, which represents many U.S. agencies engaged in international adoption.
U.S. families have adopted more than 14,000 children from Russia over the past five years, including 1,500 last year.

TITLE: Police Arrest 2 Russian Pilots In Germany
PUBLISHER: The Associated Press
TEXT: BERLIN — Two Russian men, both pilots, were taken into custody Wednesday at Berlin’s Tegel Airport after a witness told police that she suspected they were planning a hijacking, authorities said.
The two men, aged 49 and 26, were booked on an Air Berlin flight to Moscow’s Domodedovo Airport at around midday, federal police spokeswoman Sandra Pfeifer said. Although they were both registered pilots, neither was part of the aircraft’s crew, she said.
They were overheard speaking in Russian by a woman at an Air Berlin counter before they boarded the plane, said Berlin police spokesman Michael Gassen.
“She had the impression that a hijacking of the plane to Moscow was planned,” he said, without elaborating.
Pfeifer confirmed that the two men were taken into custody after a conversation was reported, but she would not say specifically what the two men are thought to have said.

TITLE: In Brief
TEXT: <strong>START a Mystery</strong>
MOSCOW (SPT) — More than half of Russians have never heard of the landmark New START arms reduction agreement signed by the presidents of Russia and the United States last month, the state-run VTsIOM polling agency said Wednesday.
A total of 52 percent of respondents in a new national survey were unaware of the treaty, while 37 percent had heard of it and only 8 percent knew that the document aimed to cut both countries’ nuclear arsenals, VTsIOM said.
Most of the Russians ignorant of the New START support the ruling United Russia party, the survey said.
The poll of 1,600 people has a margin of error of 3.4 percentage points.

<strong>FSB Kills 3</strong>
MOSCOW (SPT) — The Federal Security Service killed three people involved in the March suicide attacks on the Moscow metro after they refused to surrender, FSB chief Alexander Bortnikov said Thursday, Reuters reported.
Bortnikov told President Dmitry Medvedev that FSB agents tracked down the trio, including one who escorted the two female suicide bombers to Moscow and another who led the women to the scene.
“To our great regret, we did not manage to seize them alive,” he said in televised remarks. “They put up stiff armed resistance and were destroyed.”
A stern-looking Medvedev replied: “Identify those involved in committing this heinous crime. Destroy the ones trying to resist. Show no mercy!”
The female suicide bombers, who officials say were natives of Dagestan, blew themselves up at two metro stations, killing 40 people.

<strong>Cameron Phoned</strong>
MOSCOW (SPT) — President Dmitry Medvedev offered his congratulations to new British Prime Minister David Cameron on Wednesday, saying ties between the two nations should improve, the Kremlin said, Reuters reported.
“Russia views all-embracing cooperation and establishment of equal partnership with Great Britain as a major direction in its foreign policy, as well as a key factor in ensuring international security and stability,” the Kremlin quoted Medvedev as saying in a statement.
“I count on joint constructive work to further promote Russian-British relations for the good of our nations and solving the topical tasks of global politics,” he said.

<strong>Two Women Strangled</strong>
MOSCOW (SPT) — Two women who survived World War II were found strangled in their apartments in the same building in southern Moscow in apparent robberies, investigators said Wednesday.
The two women, aged 80 and 91, were found in their apartments at 35/2 Ulitsa Kakhovka at about 7 p.m. Tuesday.
Anatoly Bagmet, head of the Moscow branch of the Investigative Committee, said in televised remarks that robbery was the suspected motive behind the stranglings.
An unidentified investigator told Interfax that the attackers might have hoped to gain ownership of the apartments.

TITLE: Sheikh Aids Berezovsky, Abramovich
AUTHOR: By Yelena Mazneva
PUBLISHER: Vedomosti
TEXT: MOSCOW — The children of royal families have different ways of earning a living.
Sheikh Sultan bin Khalifa al Nahyan of Abu Dhabi, for example, brokered two deals between Roman Abramovich and Boris Berezovsky, possibly earning a commission of $260 million, Vedomosti has learned.
Information on deals between the Russian billionaires appeared in a recent ruling by the High Court of London in a lawsuit Berezovsky filed against Abramovich. Sheikh Sultan took part in two transactions between Berezovsky and Abramovich totaling $1.475 billion, according to a verdict by the judge, Anthony Coleman.
In 2001, a company controlled by Sheikh Sultan mediated a deal in which Berezovsky and Badri Patarkatsishvili, now deceased, sold a stake in the ORT television channel to firms controlled by Abramovich for $175 million.
Another deal, also reached in 2001, concerned a $1.3 billion transaction. Berezovsky claimed that the funds were Abramovich’s payment for 45.3 percent of oil company Sibneft. Abramovich insisted that Berezovsky and Patarkatsishvili had no stake in Sibneft and that the $1.3 billion was compensation for their help in privatizing the company.
Berezovsky said he sold “a beneficiary stake” in Sibneft to Devonia Investments Ltd. Sheikh Sultan acted as a guarantor for the deal: He paid Berezovsky and Patarkatsishvili himself before selling the assets to Abramovich.
Sheikh Sultan, 45, belongs to the royal family that has ruled Abu Dhabi for almost 250 years. His grandfather, Sheikh Zayed, was the founder of the United Arab Emirates and the first president of the federation. Sheikh Sultan’s father, Sheikh Khalifa, the eldest of Zayed’s 19 sons, had to wait for 37 years before finally becoming king of Abu Dhabi and president of the country in 2004. Last year, Forbes magazine estimated his net worth at $18 billion.
Sheikh Sultan has a degree in international studies and is a graduate of several colleges, including the Royal Military Academy Sandhurst and the University of Salford.
He is a member of the Executive Council of Abu Dhabi and heads a number of nonprofit organizations in the U.A.E., including the Emirates Equestrian Federation.
How exactly Sheikh Sultan met the two Russian businessmen is unknown. Spokespeople for Berezovsky and Abramovich refused to comment, and requests sent by Vedomosti to the U.A.E. presidential administration, the U.A.E. Embassy in Moscow and the Emirates Equestrian Federation went unanswered.
Berezovsky said Sheikh Sultan’s mediation was necessary to hide the fact that Abramovich was the final buyer of Sibneft.
Abramovich’s representatives gave an alternative explanation: According to court documents, the former Chukotka governor only learned about the deal between Berezovsky and Devonia in 2007, after court proceedings were opened in London. Sheikh Sultan’s involvement seems to have been needed to circumvent the English banking laws on money laundering, which required the payment to be registered as a “real transaction,” representatives of Abramovich were cited as saying in the court papers.
Sheikh Sultan received a 20 percent commission for his involvement in the $1.3 billion deal with Berezovsky, Abramovich’s lawyers said. This means that the Arab prince may have earned $260 million. Representatives of Berezovsky did not comment on the size of the commission, and Abramovich’s lawyers refused to reveal their sources of information.
Experts were not surprised to learn of a third party taking part in the deals. It is common for citizens of the U.A.E. and other countries to be asked to serve the interests of “unnamed beneficiaries,” said Dmitry Klyonov, a partner at UFG Wealth Management,. He added that the rank of the intermediaries depends on the size of the deal: The bigger it is, the higher the status of the parties involved.

TITLE: Software Piracy Falls In Russia In 2009
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The share of unlicensed software installed on Russian computers edged down slightly from last year.
Sixty-seven percent of the country’s software was unlicensed in 2009, down from 68 percent last year, according to a report by International Data Corp. and Business Software Alliance.
The value of illegal software in the country stood at $2.62 billion last year, the report said, down significantly from a 2008 estimate of $4.2 billion.
Spending on IT dropped 27 percent in 2009, pushed down by the global economic slowdown, while computer shipments fell 23 percent, the report said. But an expected increase in piracy to accompany the leaner times did not materialize.
“Despite the complicated situation in the world economy over the last year, measures taken over the past few years by the Russian government, law enforcement and rights holders were effective, and this helped maintain the trend of decreasing piracy,” Georg Herrnleben, BSA’s Eastern Europe director, said in a press release.

TITLE: State Envisages Capital Controls This Year
PUBLISHER: Combined Reports
TEXT: MOSCOW — The government wants to introduce capital controls by December on investments shorter than three years as the government tries to limit ruble volatility, First Deputy Prime Minister Igor Shuvalov said Tuesday, Reuters reported.
“We want to have a more privileged status for those who want to keep money in our economy for longer than three years,” Shuvalov told reporters in London. “We must do it this year, by the end of this year, because the ruble is again appreciating. We need to impose these rules as soon as possible.”
The International Monetary Fund said Tuesday that Russia must mull capital controls to defend against excessive inflows, and identified the area as one of the key challenges facing policymakers.
“Managing capital inflows is one of the key challenges facing the Russian authorities,” the IMF said in a report published Tuesday. “All lines of defense against excessive inflows — macroeconomic and prudential policies as well as capital controls — should be considered.”
The authorities must also keep inflation low by allowing greater flexibility in the exchange rate, which would discourage speculative capital flows, according to the IMF.
“Prudential regulations must be shored up to limit the risk of credit booms” including countercyclical capital requirements, restrictions on foreign currency lending and differentiated reserve requirements, the IMF said.
The ruble has gained 8.3 percent since a July 13 low as Urals crude advanced 28 percent in the same period, with the currency’s appreciation threatening to hamper Russian exports.
“The ruble is broadly in line with the current macroeconomic indicators,” Odd Per Brekk, the IMF’s senior Russia representative, told reporters.
“Absent any further substantial appreciation, we don’t see a basis for taking extraordinary steps at this stage to prevent further ruble appreciation.”
Shuvalov said there was “not much” that policymakers could do to stem the currency’s ascent in the medium term. Investors who “just come over, use the exchange rate [and] our inflation problems and disappear” should face an investment climate that is “not very good,” he said.
The Central Bank will not be able to switch to an inflation targeting regime for about “two to three years,” Shuvalov also said. Inflation will probably be 6 percent to 6.5 percent by the end of this year, he added.
Central Bank Chairman Sergei Ignatyev said last month that the bank should shift toward inflation targeting in 12 to 18 months.
Inflation targeting won’t be possible as long as Russia is using funds from its reserves to buoy the economy, Shuvalov said Tuesday.
Russia posted an estimated net capital outflow of $52.4 billion last year when oil prices dropped and foreign direct investment plummeted 41 percent. The nation saw a record net outflow of $130 billion in 2008, following a record net inflow of $83 billion a year earlier.
(Bloomberg, SPT)

TITLE: E-Government Due for Establishment by 2011
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — An electronic documentation system, known as e-government, will be implemented in full by 2011, Deputy Prime Minister Sergei Sobyanin said Wednesday at a meeting of the Communications and Press Ministry.
“We must move toward switching to electronic interagency documentation,” Sobyanin said. “By the end of the year, this problem should be solved in all ministries.”
In September, President Dmitry Medvedev criticized state agencies that have delayed introduction of the e-government, threatening to cut off their funding and appointing Sobyanin to oversee the program.
The e-government initiative is part of a national program aimed at developing the country’s information society. The web site Gosuslugi.ru was launched in April for the purpose of providing government services online. So far, the web site mostly serves as a guide to documents and bureaucratic procedures, and does not relieve people from waiting in lines for hours to register property, apply for pension benefits or open a business.
Some web services are operating: 2,700 citizens have applied for foreign passports through Gosuslugi.ru, the Federal Migration Service said Wednesday.
But applicants have complained on various online communities that they are still required to visit the FMS office to take photographs, and confirmation e-mails take so long that it is faster to apply in person.
The number of Internet users in Russia increased by 31.5 percent in 2009 compared with 2008, while the number of personal computers went up by 11.3 percent to 52.3 million, Communications and Press Minister Igor Shchyogolev said at the meeting.

TITLE: Russian Car Sales Jump 20% Because of Cash-for-Clunkers
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russian car sales made a year-on-year increase in April for the first time in 1 1/2 years thanks to the government’s cash-for-clunkers program, the Association of European Businesses said Wednesday.
The passenger and light commercial vehicle market grew 20 percent, compared with the same period last year, to 163,299 cars, the association said.
The last month of growth was September 2008, when sales grew 11 percent to 250,000 cars. The market had consistently contracted each month since October 2008.
“[April] was the first full month in which the utilization program functioned, and the results conclusively show the influence of the program, especially in the economy segment of the market,” David Thomas, head of the association’s auto committee, said in a press release.
The cash-for-clunkers program, which went into effect on March 8, offers 50,000 rubles ($1,650) in a government rebate on selected models for consumers who trade in cars that are at least 10 years old. The program is slated to offer 200,000 such rebates and run until Nov. 11.
The AEB last month raised its full-year forecast to 1.6 million cars from the 1.47 million sold last year. “All in all, [this month’s] result confirms our increased forecasts for 2010,” Thomas said.
AvtoVAZ, Russia’s largest carmaker, has been the biggest beneficiary of the program, with almost 80 percent of the program’s rebates going toward Ladas.
Lada sales in April jumped 54 percent year on year to 52,449 cars.
“The utilization program … definitely revived demand for traditional Russian automobiles. We are seeing stable growth already for the second month in a row,” said Martin Jahn, deputy chairman of the committee.
The second most popular make remained Chevrolet, whose sales rose 30 percent to 11,648 vehicles over the period.

TITLE: Cyrillic Domains Due to Operate Soon
AUTHOR: By Irina Filatova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Internet domain names using Cyrillic characters may start working this week after the world governing body for Internet domain names officially delegates the .ðô domain to Russia.
Representatives of the Internet Corporation for Assigned Names and Numbers, or ICANN, may officially assign the .ðô domain suffix to Russia at the Internet Governance Forum, which begins on Thursday in Moscow, said Andrei Vorobyov, a spokesman for RuCenter, a domain registrar.
“We’re really expecting it within days. As soon as the domain is delegated it will start working, because everything is ready on our side,” he told The St. Petersburg Times.
Once the .ðô suffix, known as a top-level domain, is assigned, the Cyrillic domain names they have registered will become operational.
ICANN in November approved the use of non-Latin characters in Internet domain names, clearing the way for domain names in Cyrillic and other national scripts.
The first domain names using a non-Latin character set became operational last week, after web sites in Egypt, Saudi Arabia and the United Arab Emirates began using Arabic script in their web addresses.
The first round of registrations for Cyrillic domains, which started in November, was marred by confusion. Initially, there was no requirement that the company registering the domain own the trademark for the site it was registering, allowing a host of cyber-
squatters to register popular names.
But new rules put in place to protect trademark holders ended up excluding a number of legitimate applications. Regulations were implemented requiring that the prospective domain names be consistent with the verbalization of the registrant’s trademark.
This meant that popular web sites whose trademarks included Latin letters, including e-mail provider Mail.ru and social network Îäíîêëàññíèêè.ru, were unable to register.
More than half of the 20,000 applications that were filed during the first round were refused, Vorobyov said, and Latin characters in the names of trademarks were the main reason for most refusals.    Registrars have taken into account the omissions and have relaxed the rules for registration, Vorobyov said.
“These are more humane rules for trademark holders,” he said.
The holders of trademarks containing Latin characters and other non-Cyrillic symbols will be able to file applications for priority registration.
The second round of priority registration for Cyrillic subdomains, the names that will precede the .ðô suffix, starts Wednesday. In this round, private companies, media outlets and political parties will also be able to file applications, Vorobyov said.
The second round will end on Sept. 30, and starting Oct. 1 everyone will be able to register for subdomains in Cyrillic.
As more countries register for domain names using their native script, concerns have mounted that the Internet will become less of a common information space and will instead devolve into a collection of segregated networks.
But Vorobyov said launching domains in Cyrillic and other scripts would open up new opportunities.
Web sites will be able to register domains in both Latin and Cyrillic, he said, making it easier to remember complicated Russian domain names, which are hard to transliterate into Latin script.
“[Writing domain names in Cyrillic] is a panacea for transliterating trademarks,” Vorobyov said.

TITLE: Bank Rossia Affiliates May Buy Ad House
AUTHOR: By Irina Filatova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Four Bank Rossia affiliates filed a request with the Federal Anti-Monopoly Service to acquire a 45 percent stake in Video International, Russia’s advertising industry powerhouse, the service said Wednesday.
Insurance group Sogaz, investment company Abros and management company Lider are among those seeking a stake in the ad sales house, said the service’s deputy head, Andrei Kashevarov.
Industry players said, however, that Bank Rossia, owned by St. Petersburg businessman Yury Kovalchuk, might acquire a bigger stake in the media seller.
A source familiar with the deal told The St. Petersburg Times that the bank’s affiliates might buy as much as 100 percent of Video International, which controls 60 percent of the country’s ad sales market. The deal may be valued at more than $500 million, the source said.
After the deal is closed, chief executive Sergei Vasilyev, also a part-owner of the company, will remain at his position for the next five years, said the source, who asked not to be identified because he was not authorized to talk to the media.
“It’s one of the conditions of the deal,” the source said.
After the deal is closed, Kovalchuk, who owns other media assets, will become one of the most powerful players in the country’s media industry.
Kovalchuk, a close ally of Prime Minister Vladimir Putin, already owns a controlling stake in National Media Group, 51 percent of newspaper Izvestia and a stake of 50 percent minus one share in publishing house News Media, which publishes the tabloid Tvoi Den.
Video International started selling advertising on National Media Group’s channels, Ren-TV and St. Petersburg’s Channel 5, earlier this year after the sales house’s major rival, Gazprom-Media, lost its contract with them in October.
Spokespeople for Video International were unavailable for comment Wednesday.  
The request to buy Video International may take up to three months to consider, but the Federal Anti-Monopoly Service was hoping to approve the deal within 30 days, Igor Artemyev, the service’s head, told reporters at the International Advertising Association’s congress in Moscow.
The advertising sector is preparing for a big shakeup after rules go into effect requiring sales houses to keep their market share below 35 percent. That means that Video International will have to end many of its contracts, leaving room for its competitors.

TITLE: RenCap: Economic Growth 
To Accelerate
PUBLISHER: Bloomberg
TEXT: MOSCOW — Economic growth may accelerate this quarter as an expansion in manufacturing gathers steam, Renaissance Capital said Tuesday.
Gross domestic product may gain an annual 8.7 percent in the second quarter and 7.1 percent in the third quarter after a 7 percent advance in the first three months, the investment bank said in an e-mailed forecast.
Inventory replenishment and record-low interest rates are helping the economic recovery gain momentum after a 7.9 percent contraction last year, the most since at least 1991. 
AvtoVAZ, the nation’s biggest carmaker, is among companies ramping up output to meet rising demand. GDP may grow 1 percent on a seasonally adjusted basis this quarter, compared with a previous forecast of 0.4 percent, according to RenCap.
“The Russian economy has a fighting chance at a real recovery,” Alexei Moisseyev, RenCap’s chief economist, wrote in the report. “Manufacturing has been the weakest link in the recovery,” and thus “any sign, even a tentative one, that manufacturing is gaining ground is very welcome and deserves attention.”
Industrial output jumped an annual 5.7 percent in March after a 1.9 percent gain in February and a gauge of manufacturing compiled by VTB Capital showed that the industry expanded at a faster pace in April.

TITLE: Building a Global Financial Center
AUTHOR: By Ian Pryde and Stephen Wells
TEXT: Now that Russia’s economy is starting to recover, the Kremlin is returning to its goal of turning Moscow into a global financial center. To this end, the Kremlin is determined to liberalize financial laws and taxation, reform ineffective institutions and exploit Russian advantages such as well-educated employees and investment opportunities in major infrastructure projects.
President Dmitry Medvedev first announced the plan to make Moscow a global financial center in his address to the nation in late 2008. But he acknowledged last month that only five of the 48 points in the government plan adopted in June 2009 had been implemented so far.
On April 7, Sergei Shvestov, head of the Central Bank’s department for financial markets, said a takeover of the RTS by MICEX would be a key step toward this goal. And in late April, Alexander Voloshin, the pro-business chief of staff under former Presidents Boris Yeltsin and Vladimir Putin, was made head of a “special coordinating project group” in the efforts to make Moscow a global financial center.
Achieving this aim will clearly bring great benefits to Russia, its companies and Moscow itself. But there is a long way to go, despite strong presidential support.
Many countries have ambitions to be financial centers. Large countries like India and China have significant and rapidly growing financial sectors to support their domestic financial needs, and foreign investors are often involved as users of those financial centers as they seek access to the domestic market. But international financial centers serve more than the domestic economy, which in the case of many countries is simply too small to support a significant financial center on its own.
True global centers also provide investor access to the assets of issuers in third countries and provide corporate finance services to those issuers. London, for example, is the base for many global fund managers wanting access to European markets, while Hong Kong is a center for Chinese companies to access international capital markets.
To gain a dominant position in global finance, Moscow needs to emulate these other centers and bring in business from outside. In Moscow’s case, the larger markets in the Commonwealth of Independent States could, in theory, be attracted to Moscow by better liquidity and superior access to foreign investors.
One problem, however, is size. Companies in the larger markets in the CIS, such as Kazakhstan and Ukraine, are more likely to list on their own domestic exchanges or in London, New York or Hong Kong, while the smaller republics cannot offer the size to transform Moscow into a global center even if they were to list all their companies there.
What’s more, with Russian companies preferring to list abroad, it is hard to see why companies from third countries should list in Moscow. While Russian companies used to list abroad partly as a question of prestige, today it is more a question of raising capital to help restructure their debt.
In addition to Moscow, there is a host of other cities that are aspiring to become global financial centers — Doha, Mumbai, Shanghai, Bangkok, Kuala Lumpur and Riyadh. Some of these aspirants have realistic business models and are not simply going head-to-head with existing centers. Moscow certainly has its work cut out for it as it pursues its global ambitions.
Some of the new aspirants favor niche targeting, for example Islamic finance in Malaysia. Others have taken the best from the existing financial centers and added a local access or time zone advantage, such as the Dubai International Financial Centre, which has adopted English law for finance, as has Qatar, but provides superior access to Middle Eastern markets. Moscow is hoping it can serve as a bridge between Europe and Asia.
True global financial centers have other features that attract foreign participation. There are four key requirements without which no center will attract international participation:
1. Communications infrastructure, including solid and uninterrupted international links and modern IT capabilities.
2. Legal certainty through clear commitment to the rule of law, protection of property rights and efficient legal processes. Fiscal structures and policies must also be clear and predictable.
3. Fair treatment. Markets must be better regulated so that local insiders are unable to exploit their position. Standards of governance of corporations and institutions must ensure disclosure and the fair treatment of minority shareholders through adequate and consistent disclosure.
4. Availability of skills at all levels either locally or through the free admission of foreign staff.
In the end, Russia needs to convince skeptical international investors that it can excel in all of these key areas. One of the greatest hurdles, however, is the country’s top-down management style, particularly in the government, and this will make Moscow less attractive to global market players. If the Kremlin cannot change this mentality, the largest players will always prefer the established global financial centers over Moscow.

Ian Pryde is CEO of Eurasia Strategy & Communications in Moscow, and Stephen Wells is head of its capital markets group and former chief economist at the London Stock Exchange.

TITLE: Raining on Putin’s May 9 Parade
AUTHOR: By Yulia Latynina
TEXT: Five years ago, then-President Vladimir Putin spent a ton of money on the May 9 parade. He blocked the roads in the center of Moscow, expelled all the homeless and other undesirable citizens and invited a host of Western leaders to serve as a backdrop to his personal Victory Day celebration. Everyone on his invitation list flew in for the event.
During this year’s parade, Russia went even further. More money was spent on the event, Red Square shook as S-400 mobile missile systems (which, by the way, do not actually exist) rolled past, and practically the entire Russian Air Force flew overhead. The world’s top leaders rained on Putin’s parade: They didn’t attend.
U.S. President Barack Obama, British Prime Minister Gordon Brown and Conservative Party leader David Cameron, and even Putin’s best friend, Italian Prime Minister Silvio Berlusconi, stayed home. Of course, the leaders of Germany and China — the two major powers most dependent on Russia’s raw material exports — had no choice but to attend.
Israeli President Shimon Peres also attended because for Jews the victory over Adolf Hitler is truly sacred.
Acting Polish President Bronislaw Komorowski arrived but was rudely rebuffed. Amid a  swarm of photographers, President Dmitry Medvedev solemnly handed Komorowski 67 volumes of archival material concerning the Katyn massacre. Medvedev did this to pretend that it was a tremendous act of good will, concealing the fact that the archives had already been released to the public a long time ago. Medvedev would have done a lot more to improve Russian-Polish relations if he had presented Komorowski with a gift-wrapped copy of “Eugene Onegin.”
Belarussian President Alexander Lukashenko’s visit turned out to be just window dressing. After flying in on May 8 to attend an informal summit of the Commonwealth of Independent States, he used the occasion to proclaim that Russia and Belarus are eternal Slavic brothers. Nonetheless, Lukashenko did not bother to stick around for the grand parade the next day. Even the Kremlin’s newly acquired strategic ally,  Ukrainian President Viktor Yanukovych, ditched the event. It seems that the Kremlin’s $40 billion gas discount wasn’t enough to lure him to attend.
Lukashenko’s behavior is a good illustration of how unpredictable dictators can be as they switch their foreign policy stances at the drop of a hat. For example, Lukashenko only days ago fired a volley of insults at Russia over the Kremlin’s supposed role in the Kyrgyz revolution last month. But the next day, Lukashenko switched gears as he came to Russia with all smiles and chastised the West.
Chinese leader Hu Jintao did attend the parade. Despite the large gulf separating China and Belarus, they have one thing in common: The leaders of both states don’t need to answer to their citizens. If Putin invited them, why not come? They don’t have to explain their decision in any case to their people. Western leaders decided not to come. After all, they would face serious questions from critics questioning the wisdom of accepting Putin’s offer.
So, the Kremlin’s holiday was a complete embarrassment. It is like a five-star general who spent a fortune on a lavish birthday bash for himself at a fancy restaurant — only to be disappointed when most of his friends and relatives did not attend. But a couple of guys did show up — the kind who would never turn down an opportunity to wine and dine at someone else’s expense.

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.

TITLE: From dusk til dawn
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Dozens of the city’s diverse museums are preparing to stay open to the public all night long on Saturday for the annual Museum Night, an event held to celebrate International Museum Day.
On Saturday, participating museums will open their doors to visitors and prepare special programs such as one-day exhibitions, concerts, performances, original excursions, master-classes and historical reconstructions.
In 2008, at least 33 city museums and exhibition centers took part in the event, hosting a total of 24,000 nocturnal visitors, while last year, it featured 47 museums, galleries and libraries, which greeted more than 64,000 people.
This year, Museum Night has attracted some new participants, such as the Arctic and Antarctic Museum, the Planetarium, the Geological Prospecting Museum, the Cat Museum, and three museums in the palace-and-park- ensemble of Peterhof: the Benois Family Museum, the Imperial Bicycle Museum and the Playing Cards Museum.
In keeping with tradition, Museum Night runs from 6 p.m. through 6 a.m. An innovation of this year’s event is the introduction of a single ticket that will be valid for all of the museums taking part. 
One of the most interesting excursions for both children and adults on Saturday night may be a night at the Leningrad Zoo, where visitors will have a unique opportunity to see what more than three thousand residents of the zoo get up to after sunset.
Continuing the animal theme, the Cat Museum in Vsevolozhsk promises cat concerts on the roof, an animal fashion show and a photo competition, as well as competitions on knowledge of cat proverbs.
The Pushkin Children’s Library will also stay open for the night, with a fairytale carriage full of characters from children’s books travelling along Bolshaya and Malaya Morskaya streets.
Some of the intriguing exhibits on display at the Geological Prospecting Museum include mammoths, a sea pangolin, woolly rhinoceroses and Trilobite.
The Popov Museum of Communications will offer its nighttime visitors the chance to hear broadcasts from the very first radio stations and see radio studios from different eras, as well as the chance to present a radio program and create a futuristic radio.
At the Artillery Museum, visitors will have the opportunity to sit by a fireplace together with vikings, knights, Napoleonic soldiers and Red Army soldiers.
Those who remain skeptical of the value of brushing one’s teeth and the dangers of smoking will be able to see a Smoker Doll, a model of a toothbrush and a pyramid of healthy nutrition at the city’s Hygiene Museum.
Visitors to the Playing Cards Museum can learn how our ancestors played solitaire in the early 20th century and attempt to build a house of cards, while the Imperial Bicycle Museum offers the chance to have one’s picture taken in front of copies of retro-bicycles, and even the chance to try riding them.
The Russian National Library invites city residents and guests to attend a night of Bach music, dedicated to the 325th anniversary of the composer’s birth. The concert will be held at the library’s concert hall on the Fontanka River.
The estate of Princess Yekaterina Dashkova, who participated in the coup that brought Catherine the Great to power, will mark Museum Night by opening its central section to the public for the only time this year, while the branch of the Museum of Political History located at Bolotnaya Ulitsa 13 will devote the entire night to activities for fans of murder mysteries and detective novels.
Museum Night is an international event that takes place in 42 European countries on the same date. Once a year, about 2,000 museums in participating countries resist sleep throughout the night, opening their doors to everyone wishing to see museums in an unusual light — that of the moon.
A combined ticket valid for all of St. Petersburg’s museums can be bought at any of the participating museums on the night, for the reasonable price of 250 rubles. Some participants are also selling them in advance, such as the zoo, the Pushkin’s Children Library, Museum of Religion History, Kirov Museum, Peter and Paul Fortress and Manezh exhibition hall. Tickets are also on sale at the city’s theater box offices.

More detailed information about Museum Night, including a full list of the museums taking part and the nighttime program, can be found at www.artnight.ru (Russian only).

TITLE: Chernov’s choice
TEXT: <strong>Mikhail Novitsky</strong>, who fronts the politically conscious band <strong>SP Babai</strong> and leads the preservationist movement <strong>Green Wave</strong>, said <strong>Chukotka</strong>, the band’s headquarters and underground rock club, had been shut down last week for political reasons. 
“I have a feeling that it’s somebody’s cruel will, because we could have come to an amicable agreement — we’ve occupied the place for 20 years and everybody was happy,” Novitsky said Thursday. 
Green Wave is a movement dedicated to the preservation of parks and lakes endangered by the city authorities, who are seeking to decrease the number of protected green areas.  
One of the movement’s tactics is to invite local celebrities such as film director Alexander Sokurov to plant trees on land that has been signed away for infill construction by City Hall, thus drawing attention to the problem. 
SP Babai also frequently performs at opposition rallies, most recently at the banned May Day democratic rally. 
Located on Ulitsa Blokhina on the Petrograd Side, Chukotka was closed by the building’s owners while the band was away helping to clean up the area around Yastrebinoye Lake in the LenOblast.  
According to Novitsky, the iron door leading to the basement where the club was located was welded shut on April 30, while on May 7 the band’s belongings were thrown away and more valuable pieces of equipment were stolen. 
“Chukotka was damaged and robbed,” Novitsky concluded, adding that he is talking to the police about opening a criminal case. 
The new HQ of SP Babai — and Green Wave — will be the Green Wave Tower, the former water tower located on the territory of the Forestry Engineering Academy, Novitsky said. 
Good news this week is that <strong>SKIF</strong>, the Sergei Kuryokhin International Festival, will be held this weekend. Held annually since 1997, the festival is still the best place to hear some international avant-rock, improvised, alt-rock and folk music. 
This year’s festival will feature 32 acts performing on two stages of the Sergei Kuryokhin Modern Art Center on Friday and Saturday.  
Friday’s schedule features <strong>Circle</strong>, an experimental metal-rock band from Pori, Finland, <strong>The Thing</strong>, a Norwegian/Swedish improv trio that blends classic free jazz with garage rock, <strong>Watcha Clan</strong>, a French folk-fusion band that sings in French, Arabic, Hebrew and English, and <strong>DAT Politics</strong>, a French electronic music group formed in Lille in 1999. 
Saturday will see <strong>Zu</strong>, an Italian band that describes its music as “highly intricate, experimental , metal/math/no-wave/free/noise/punk/jazz inspired work,” and <strong>Sonore</strong>, the trio formed by some of Europe’s leading improvising musicians: Peter Brotzmann, Mats Gustafsson and Ken Vandermark. 

<em>Concert programs start at 8 p.m. at the Sergei Kuryokhin Modern Art Center, 83 Sredny Prospekt (Vasilyevsky Ostrov). Tel: 322 4223. www.kuryokhin.net</em>

<em>— By Sergey Chernov</em>

TITLE: Strength in numbers
AUTHOR: By Matthew Brown
PUBLISHER: The St. Petersburg Times
TEXT: A big fish menacingly chases a school of small fish, depicted on a panel on one wall of the small room at St. Petersburg’s European University currently hosting “When One Has to Say ‘We’: Art as the Practice of Solidarity,” a thought-provoking exhibition probing art and politics in contemporary Russia.
But the fish hides a secret. 
In front of it stands a weights machine from a gym, modified with pulleys overhead that connect it mysteriously to the fish picture. The show’s curator, Dmitry Vilensky, was on hand at the opening of the exhibition last month to explain the relationship between the bulky contraption and the graphic representation of how the powerful (the big fish) can gobble up the powerless (the little fish).
“Grab that handle,” said Vilensky, taking hold of one handle on the weights machine. As an exhibition-goer grabbed the other, Vilensky instructed: “Push!” 
With two people pushing the weighted handles forward, the pulleys overhead guide cables connected to the fish panel on the wall in front and lift the panel. By combining manpower and pushing hard, the panel is raised to reveal a new image underneath.
The new picture is a reversal of the first. The school of small fish has organized itself into the outline of a bigger fish and is chasing the first big fish. 
The message couldn’t be clearer.  
Vilensky said the show is an attempt to show the relationship between the social sciences, including political philosophy, and contemporary art. The show opened on April 8 as part of a three-day international conference entitled “The Politics of the One: The Limits of Fragmentation and the Chances for Consolidation,” which was held at Smolny College of Liberal Arts and Sciences and the European University.
“I would say there is an urgency to showing the connection between art and politics — and to change the idea of what true politics is about,” said Vilensky. 
And what is it about? 
“It is about possibilities of emancipation, of questioning the current order and showing the way how real power, the way life is administered, is constructed and thus is changeable.”
The apparently modest aim of using art to show that the “current order” is “changeable” takes on the urgency Vilensky identifies under the conditions of authoritarian social and political control in which he says Russians currently live. 
This is vividly illustrated by a program of videos projected onto one wall of the exhibition space showing a series of creative “flash mobs” taking place on the streets of St. Petersburg that challenge notions of the use of public space. Some of the videos date from as long ago as 1996 and many have English subtitles.  
A display of photographs by St. Petersburg Times reporter Sergey Chernov chronicles frequent attempts by members of the public to demonstrate against the authorities of the Russian state only to be equally frequently, often illegally, dispersed, arrested or physically attacked by representatives of the law enforcement agencies.
In addition to being a member of Chto Delat, a group of Petersburg- and Moscow-based artists and philosophers, Vilensky is director of the Laboratory of Critical Art at the European University, and there is a clear academic undertow to the selection and content of the works in the show. But for the most part, like the big fish machine, the works are accessible and even playful in their approach to the topic.
It is worth taking time, for example, to decipher a series of randomly placed hieroglyphs around the exhibition space using the key pasted up in a corner. Symbolic wings, for example, mean “freedom” and a pair of boots mean “movement” — put them together and you get “freedom of movement.” It is simple, didactic, perhaps na?ve, but the spirit of agit-prop art runs throughout the exhibition. Parodies of Soviet avant-garde graphic art, now railing against Putinist energy politics and the corrupt nature of his nationalist kleptocracy rather than the Marxist-Leninist slogans of the originals make for an eye-catching display on another wall.
In issuing a challenge to the “current order,” it is no accident that the show is taking place at the European University in St. Petersburg. 
The university is an almost unique non-state institution set up during a period of intellectual optimism in the late 1990s to offer progressive graduate and post-graduate education in the liberal arts, social sciences and humanities. 
Although one of its earliest supporters was the late Anatoly Sobchak, former mayor of St. Petersburg and an oft-cited “mentor” to Vladimir Putin, the European University’s academic independence made it a target of official pressure in 2008. 
After accepting a grant from the European Commission to fund an election monitoring program, something that was a political hot potato as Putin prepared to install his handpicked successor to the Russian presidency later that year, the university was shut down by a St. Petersburg court for six weeks under the pretext of enforcing fire safety regulations.
Since then, the European University has come to an accommodation with the authorities but continues to offer a platform to independently minded groups such as the Chto Delat collective and the Affinity Group of politically conscious artists, creators of the big fish machine that features so prominently in the current show. 
Vilensky said that in the current climate, when even former Soviet dissident artists crave official patronage and have been co-opted by the state, the European University is “the only place right now where such a show could happen.”
That makes this small but gutsy display of activist art quite a special event. 
Vilensky said, however, it has been met by the collective shrug of the shoulders one might expect of an academic and cultural establishment beholden to a state that has shown it is quick to wield the big stick.
“There has been no professional reaction so far,” to the show, Vilensky said. “But this is no surprise in a city where the main museum [the State Hermitage] can sell Saatchi promotional products as art [at the ‘Newspeak: British Art Now’ which was on display until January].”
When the "When One Has to Say 'We'" opened in April it was also ignored by St. Petersburg's Russian language media. This was perhaps predictable given the self-censorship the press practices in the nervous atmosphere fostered by the "current order" that the show itself hopes to question.
“It is very symptomatic that your publication [The St. Petersburg Times] is the only one which has reacted to this project, which we had planned as a chance to change the local situation and bring up the issues that we have,” Vilensky said, adding that such issues are usual “as a part of the progressive international art world.”
Vilensky said the show, which may eventually be shown in cities abroad, was intended to raise political questions “in Russia and in Russian.” 
“But again I need to explain all this stuff in English,” he said, “and I feel that this really represents the situation in a society where the public sphere has almost collapsed.” 
“When One Has to Say ‘We’” remains open for visitors until the end of June. Its organizers are holding various talks, seminars and lectures connected to the topics it raises. 
Vilensky said: “We keep on educating people and pushing the situation forward.” 

“When One Has to Say ‘We’: Art as the Practice of Solidarity” runs in the Sportivny Zal of the European University: www.eu.spb.ru. 

For more information on the Chto Delat group, see www.chtodelat.org and  http://chtodelat.wordpress.com

TITLE: French resistance
AUTHOR: By Tobin Auber
PUBLISHER: The St. Petersburg Times
TEXT: With a deft touch that will delight many of our British readers, this new restaurant from the people who brought us Ryba, Probka, the Mozzarella bars and Il Grappolo notes on its menu that it features “non-French cuisine.” Perhaps St. Petersburg’s dining scene is waking up to the fact that the cuisine of our arch enemies is somewhat overrated, we thought. Perhaps the work of the world’s leading TV chefs, Jamie Oliver, Gordon Ramsay et al, has not been in vain? 
In fact, Entrecote is not short on French dishes and, as our waitress very helpfully explained, the restaurant is only “non-French” in that it attempts to avoid some of the negative connotations that Gallic cooking has accrued — the portions here are not miniscule slaps in the face to anyone with a decent appetite and they’re not extortionately priced. That’s the theory, at least. 
The restaurant is located on the corner of Gorokhovaya Ulitsa and Bolshaya Morskaya in the former premises of the Orient restaurant, which was popular with foreign tourists, largely due to its location on the way to or back from the city’s main attractions, and with people in desperate need of sustenance at 3 a.m. — finding something to eat in the early hours in St. Petersburg is becoming increasingly difficult. 
As usual, the Probka people have done a cracking job with the interior. They’ve maximized the natural lighting by opening up the apertures of the windows as far as possible — this never fails in St. Petersburg, especially as it always provides excellent views, and you wonder why many other restaurants in the city miss this trick. The d?cor is stylishly minimalist, with some nice touches that prevented it ever getting monotonous — a baby grand piano in the center of one room, a vast table where single diners will be able to eat without feeling that their table is an island in an ocean of solitude, and a wheel bolted to the ceiling with thick candles placed on top of it.
The menu is also fairly minimalist, fitting onto one piece of A3 paper. There are three pizzas, three pasta dishes, three fish dishes, a small selection of salads, some starters and, unsurprisingly, three entrecote cuts of meat to choose from: French, American and Wagyu. The prices aren’t astronomic, but then they’re not for the penny-pinching either, with the American steak costing 330 rubles ($11) per 100 grams and the slightly more exotic Japanese Wagyu costing 640 ($21). A pizza will set you back 360 rubles ($12), while the pasta dishes will cost you about 500 rubles ($16.50). 
We started with a Nicoise salad, and were given the option of having it with tinned tuna (395 rubles, $13) or fresh tuna (450 rubles, $15). We took the latter, which came with chopped melon, a very fresh salad and a dressing that didn’t overpower the succulent pieces of fish. Definitely a thumbs up. The feta salad (295 rubles, $9.8) also relied on the quality of the ingredients — the very delicate, soft feta cheese was nothing like the blocks of rubbery dairy product that is sold under the same name in cartons in the city’s supermarkets. 
Vegetarians be warned: There is little to choose from on the menu at Entrecote, although what there is impresses. The vegetable terrine with mustard mousse (265 rubles, $9) was a visual work of art, with very fine slices of eggplant, zucchini and roasted bell peppers layered rather than having been put through a blender. Even without the peppery mousse this would have been a taste sensation, but its frothy accompaniment gave it another dimension. 
We took a 200-gram American steak (760 rubles, $25), which was wonderfully tender, and a hamburger with homemade fries (390 rubles, $13), which was something of a disappointment — the bap was cold and the outsize fries (imagine a McDonald’s fry but about eight times the thickness and with little of the evil, oil-induced crunchiness) were a bit too healthy for their own good. The size of the portion was also, dare we say it, a bit too French.
Our poor vegetarian accidentally overlooked the black truffle pizza (luckily, as it costs 1,050 rubles, $35), and was left munching on a garnish for her main course — ruccola salad (180 rubles, $6). She made up for it later, though, with apple pie accompanied by a scoop of vanilla ice-cream (270 rubles, $9.) Thin and crispy, and served with high quality ice-cream, it was also drizzled with a caramel sauce that was an excellent touch.
There are a few more details that you should bear in mind with Entrecote. Firstly, it promises bouillabaisse on the weekends (albeit at a price of 1,200 rubles, $40); secondly, still attempting to establish itself after its recent opening, it currently has a 20 percent discount on all dishes; and from June it will be offering breakfasts.

TITLE: Rent Dispute Preceded School Attack in China
AUTHOR: By Alexa Olesen
PUBLISHER: The Associated Press
TEXT: HANZHONG, China — A Chinese man who hacked to death seven kindergarten students as young as 3-years-old had argued with the school’s manager over the property’s lease, neighbors said Thursday, offering a possible motive behind the latest in a string of bloody rampages in the nation’s schools.
The school’s manager and her elderly mother were also killed in the attack Wednesday, which left 11 other children hospitalized. It was the deadliest of five such assaults on schools in less than two months, and occurred despite heightened security countrywide, with gates and cameras installed at some schools and additional police and guards posted at entrances.
The attacks have raised concerns about the rising emotional stress in China’s high-pressure, rapidly changing society, along with a dire lack of infrastructure to diagnose and treat severe mental illness.
On Thursday, police cordoned off the private Shengshui Temple Kindergarten, a tumble-down two-story building on the rural outskirts of Hanzhong, an industrial city of nearly 4 million people.
A rusty merry-go-round stood silently in its inner courtyard while dozens of officers circulated through the streets of the surrounding farming villagers to keep an eye out for unrest.
The attacker who charged into the kindergarten Wednesday and hacked at his victims with a cleaver was a familiar figure to them, according to doctors and residents. The killer, 48-year-old Wu Huanming, committed suicide at home following the attack.
Neighbors said Wu Huanming had leased his house to teacher and school administrator Wu Hongying for the kindergarten, but there was a dispute over the rent. He then demanded the property back, but Wu Hongying asked to hold onto it until the children’s summer vacation.
Zhen Xiulan, a 71-year-old villager who lives about 200 meters from the school, said Wu was known to be quiet and mild.
“This kid was very honest and didn’t talk much. He had a very soft and gentle personality and didn’t have mental problems that we knew of,” said Zhen, who claimed to have known Wu his entire life.
“None of us would ever have imagined he would do something so terrible,” Zhen said.
She said Wu had two children as well as two younger brothers.
Zhen, who was at home when the attacks happened, said the bodies of the children had massive head gashes, while the teacher killed had been almost decapitated.
Six of the most badly wounded children — four boys and two girls between the ages of 3 and 6-1/2 — were being treated at the 3201 Hospital in Hanzhong and were in stable condition in intensive care with head wounds, said Zhao Fangling, the vice director of the hospital. The other five survivors were being treated at a separate hospital.
“We’ve never seen anything like this before, never. When we saw the mothers in pain who had lost their children, all of us were in tears,” said Zhao, visibly shaken.
The director of the hospital, Cui Xiangbin, said the killer was known to the children.
“The children all knew him, they saw him every day. I can’t describe how it made me feel when I heard about the scene, I felt terrified and my heart went cold,” Cui said.
As is common in such tragedies, relatives of victims were being kept away from the media, while police officers followed journalists, stopping and removing them from some areas and demanding identification. At least one television crew was forcibly ejected from its hotel.
The carnage started as class was beginning Wednesday, the local government said.
It said Wu entered the kindergarten and killed Wu Hongying and a student on the spot, then began hacking at the 18 others, according to a city government statement.
Six students and Wu Hongying’s 80-year-old mother died later in the hospital of their wounds, it said. None of the 11 hospitalized survivors was in immediate danger.

TITLE: Summer Travel Plans Left Up in the Air
AUTHOR: By Shawn Pogatchnik
PUBLISHER: The Associated Press
TEXT: DUBLIN — It’s been a month now, and Iceland’s volcano shows no sign it will stop belching ash across Europe anytime soon. A whole continent is rethinking its summer vacation plans — and struggling airlines are wondering how to cope in the cloud of uncertainty.
Although the global disruption of last month’s massive eruption has faded, smaller ash plumes snarled air services intermittently over the last week all the way to Turkey — more than 4,100 kilometers from the Eyjafjallajokul volcano.
Air-control authorities and geologists agree that the continent must be braced indefinitely for rapid shutdowns of air services as computerized projections try to pinpoint where the ash clouds will float next at the whim of shifting winds.
“We do our best to make reliable predictions. We do not pretend to be psychics,” said Einar Kjartansson, a geophysicist at the Icelandic Meteorological Office, who has often been asked to guess the volcano’s next move since it began spitting lava and ash March 20.
Volcanic ash, invisible to traditional radar and indistinguishable to the eye from normal clouds, can sandblast aircraft and force jet engines to shut down. Huge volumes of the debris forced most of northern Europe to shut its air services April 15-20, grounding an estimated 10 million travelers worldwide.
Since then the ash plume has thinned and spread out, shifting shape by the hour, rising into North Atlantic air routes and imposing awkward detours on hundreds of trans-Atlantic flights daily.
The costs to airlines associated with an ash cloud can add up quickly. Consider that two hours of jet fuel to divert to another airport can cost $5,000 to $10,000 depending on the size of aircraft involved.
Last weekend, Lufthansa couldn’t land in Munich so diverted planes to other German airports and bussed passengers the rest of the way.
Lufthansa spokesman Thomas Jachnow said the airline hadn’t calculated yet how much extra costs it was suffering because of the sporadic diversions and grounding of aircraft over the past week. Dozens of European airlines have suffered similar extra costs and are already lobbying their national governments to help foot the bill, which includes paying the hotel and food bills of stranded customers.
Jose Luis Barrera, deputy president of Spain’s College of Geologists, said Europe should get ready for ash-covered inconvenience at least through the summer — and perhaps longer. He noted that the volcano’s last eruption ran from 1821 to 1823.
“We’re going to have to learn to live with the volcano,” Barrera said. “Just as in California, people learn to live with the earthquake that may be waiting for them. ... This is the same. Preventive measures will have to be taken for if and when the mass of ash gets worse.”
Lufthansa, one of Europe’s most financially secure airlines, said its bookings are on target with what they would expect this time of year. But analysts warned that most carriers are on shakier financial ground, depend on summer holidaymakers for the bulk of their profits — and are particularly vulnerable to a drop-off in bookings now.
“That is why all airlines are monitoring closely what affect it (the ash worries) will have on their bookings,” said John Strickland, director of JLS Consulting, a London-based aviation consultancy firm. Airlines in fact are trying to get some relief from the European Union for the hotel costs they absorbed during the Europe-wide shutdown.
Airline, business and tourism leaders also increasingly have questioned Europe’s competence to measure the true threat.
Criticism has been sharpest in Ireland and Britain, Iceland’s southeast neighbors and fellow islands heavily dependent on air links for their economic health.

TITLE: Blasts, Gunfire Heard on Thai Capital’s Streets
PUBLISHER: The Associated Press
TEXT: BANGKOK — Several gunshots and at least four explosions were heard Thursday night in central Bangkok where Red Shirt anti-government protesters are camped amid expectation that security forces could launch a crackdown.
It was not clear who was shooting, but the sounds came after the government said it will impose a military lockdown on the area to evict the thousands of so-called Red Shirt protesters. There was no immediate word if anyone was hurt.
A reporter for TNN television said electricity went out in the Red Shirt protest zone in Rajprasong, a posh area of shopping malls, hotels and upscale apartments that they have occupied since April 3 in the intractable political crisis gripping the country.
Calls to police and army spokesmen seeking comment were not answered.
The Red Shirts, many from the rural poor, are demanding an immediate dissolution of Parliament. They believe Prime Minister Abhisit Vejjajiva’s coalition government came to power illegitimately through manipulation of the courts and the backing of the powerful military.

TITLE: Euro Loses Bounce From 
Bailout
AUTHOR: By Pan Pylas
PUBLISHER: The Associated Press
TEXT: LONDON — The euro soared after the EU announced a startling $1 trillion financial rescue package earlier this week. But that respite has evaporated — a sign that worries remain about the heavy debts burdening European governments.
The euro was back near 14-month lows Thursday, at $1.2586, down 0.3 percent on the day. That puts it within a cent of where it was just before rumors of the bold European Union move swept the market.
The euro spiked to a high of $1.3048 on Monday, when the package of loans to be made available if struggling countries need them was announced after frantic talks into the early hours. Policymakers breathed a sigh of relief that their “shock and awe” package had helped to shore up confidence in the shared currency.
Though the package has helped ease concerns of a wave of imminent debt defaults within the 16-country eurozone, currency traders are realizing the underlying problem has not gone away — how are the highly indebted countries going to get their public finances under control?
In particular, there are acute worries that the Greek government — however sincere it is — will just not be able to push through the draconian measures it has agreed to in return for an earlier, 110-euro billion rescue over three years, given the likely political and social unrest.
“The government will be attempting to implement nothing short of a cultural revolution amidst a depth of feeling that will not be assuaged with ease — if at all,” said Neil Mellor, senior currency strategist at Bank of New York Mellon.
Those fears are unlikely to have been eased by comments made by Argentina’s President Cristina Fernandez, who said earlier this week that the measures “unfortunately are condemned to failure.” Argentina had the world’s biggest sovereign debt default in 2001.
Alongside the lingering default fears, there are also questions regarding the European Central Bank’s new role of buying government bonds in the secondary markets to maintain liquidity and keep yields low. It’s clear that the German Bundesbank’s president, Axel Weber, is not too enamoured with the bank’s new responsibility, as it could stoke long-term inflationary pressures and leave the bank’s balance sheet exposed to pretty worthless government bonds. Weber also sits on the ECB’s board and he’s considered the favorite to replace Jean-Claude Trichet as the ECB’s head next year.